The delinquency rate on loans extended by South Korean banks dropped in December from the previous month, the financial watchdog said Monday.

The average delinquency rate of bank loans stood at 0.64 percent at the end of December, down 0.25 percentage point from a month earlier, according to the Financial Supervisory Service.

Over the cited period, 4.5 trillion won ($4.09 billion) of debt was paid off, while 1.3 trillion won of fresh bad loans were added, the FSS added.

The overdue rates of corporate debt declined 0.33 percentage point to 0.77 percent, with those for household loans falling 0.13 percentage point to 0.49 percent.

Loans with both the principal and interest overdue by more than one month are considered delinquent.

The outstanding amount of won-denominated loans came in at 1,255.8 trillion won as of end-December, up 3.7 trillion won, or 0.3 percent, from the previous month. Those extended to households reached 518.2 trillion won, up 5.5 trillion won over the cited period, while corporate loans lost 3.6 trillion won to 705.9 trillion won. (Yonhap)